Centene Corporation

Centene had a successful first quarter, showing continued positive momentum operationally which was demonstrated by its all-around beat. The company raised its premium and service revenue forecast by $3.7 billion, with full-year 2023 adjusted EPS guidance at $6.40. Centene has a clear vision for how it intends to execute and transform sustainably as it sets itself up for the long term, and it is confident in its long-term growth algorithm. The major drivers of its revised 2024 earnings floor are Medicaid redeterminations and its 2024 Medicare bid strategy. The management sees an opportunity to make targeted investments in Medicare that enhance its ability to reach and serve its members, including its distribution capacity, provider enablement tools to support value-based care, and the acceleration of digital capabilities that will differentiate the WellCare member and provider experiences going forward. Centene’s top management believes that returning to WellCare’s roots in serving lower-income, diverse, and complex seniors is an anchoring position that aligns perfectly with the fastest-growing sub-segment of the Medicare Advantage market. We give Centene Corporation a ‘Buy’ rating with a revised target price.